Picking a Software Vendor For Your Business

Selecting the right software product is critical to the success of your business. Do it properly, and the right software can help propel your business to the next level. Do it poorly and you could end up with an entirely different situation: wasted money on a software package that doesn't deliver, business interruption, unhappy customers, and even lost profits from lost data and inefficient processes.

How do you pick the right software package? Here are four things you must do when choosing a software package:
1. Understand and document the business requirements

2. Write a proposal for vendors to review

3. Compare the vendor responses against the business requirements

4. Invite vendors in to present the software product
Understand and document the business requirements

The most important step is to clearly define your business requirements. In other words, define precisely what you really need in the software package. Do you really need a full CRM package, with all the bells and whistles? Or is a streamlined contact management package all that's required? After all, if you don't know what you want, how will you know when you have it? Not all packages are created equal. This step is critical to making sure your internal team agrees on what is required from the software. It also gives the vendor an opportunity to understand your needs and compare those needs to the functionality of the software.

Write a proposals for vendors to review

After you have gathered and documented the business requirements, send them to the vendors that sell the type of software you are interested in. This is called sending out a request for proposal or RFP. These proposals need not be complex. All you want to do is let the vendors know what your requirements are for the software.

Compare the vendor responses against the requirements

When the vendors respond to your RFP, you will want to carefully review their responses to satisfy yourself that the software meets your key requirements. The purpose here is to prioritize the most important business requirements, compare them to vendor's response and determine if you want to move forward with that package (and that vendor). In this stage it is important to evaluate the vendor as well as the product. When you select a product, you are also selecting a vendor. This is a long-term relationship and it is important to feel comfortable with the vendor. You will also want to be fully satisfied that the vendor will be there to support your needs in the long run.

Invite vendors to present the product

The final step in the selection process is to make a short list of software packages that appear to meet your major requirements and then learn more about them. Invite the vendors on your short list in to do a "big picture" presentation. After this series of presentations, you will understand who is best qualified and whom you want to move forward with. Include key members of your internal team in this evaluation process-empower them to help choose the software that will meet their most crucial needs. Then compare notes internally, discuss the pros and cons, and pick the software and the vendor that best meets your overall needs.

Congratulations. You have selected not only a software solution but a vendor relationship as well. There is still much to do, including negotiating a contract, but you can move forward with assurance because you're confident you made the correct decision.

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